I’m very lucky to have the opportunity to talk with entrepreneurs all the time. There are tons of brand new startups here in Hong Kong and around the world. Entrepreneurs take me out for coffee all the time to pick my brain and seek advice.
Many founders mock up a few screen shots, cobble together a proof of concept, go to town in PowerPoint, then have lots of meetings with people like me asking: “do you like my idea?” and “how do I get money?”
As I said last week on this blog, the economics of a startup have changed, yet again. Since it takes less and less money these days to get a venture off the ground, my advice has been consistent to new entrepreneurs: don’t spend any time in the early stages looking for money.
Startup founders who spend most of their time meeting people and looking for money before they write a single line of code are wasting their time. This is precious time that could be used building a prototype and then going out and validating that prototype with potential customers. What Steve Blank famously calls “Get the hell out of the building” and doing Customer Validation. We all know that almost all startups go through the proverbial “pivot” and the faster we get there, the better.
Alternatively, if the startup got money right away, we all know what would happen, they would be nose down building their product and trying to sell it. The problem of course is that the idea would not be properly vetted and validated. It would take longer to “get out of the building” and eventually pivot, wasting your investors money in the process.
My advice is to scrimp, save, work nights and weekends, give away sweat equity and don’t go for any seed funding until well after your second or third prototype was validated by potential customers. Once you’ve done that, you’ll find that funding is much easier to obtain anyway.
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The opinions expressed herein are my own personal opinions and do not represent
my employer's view in anyway.